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Private borrowing during the financial revolution: Hoare's Bank and its customers, 1702–241

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  • PETER TEMIN
  • HANS‐JOACHIM VOTH

Abstract

The financial revolution improved the British government's ability to borrow, and thus its ability to wage war. North and Weingast argued that it also permitted private parties to borrow more cheaply and widely. We test these inferences with evidence from a London bank. We confirm that private bank credit was cheap in the early eighteenth century, but we argue that it was not available widely. Importantly, the government reduced the usury rate in 1714, sharply reducing the circle of private clients that could be served profitably.

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  • Peter Temin & Hans‐Joachim Voth, 2008. "Private borrowing during the financial revolution: Hoare's Bank and its customers, 1702–241," Economic History Review, Economic History Society, vol. 61(3), pages 541-564, August.
    • Handle: RePEc:bla:ehsrev:v:61:y:2008:i:3:p:541-564
    DOI: 10.1111/j.1468-0289.2007.00420.x
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    1. Mirowski, Philip, 1981. "The Rise (and Retreat) of a Market: English Joint Stock Shares in the Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 41(3), pages 559-577, September.
    2. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(4), pages 803-832, December.
    3. Quinn, Stephen, 2001. "The Glorious Revolution'S Effect On English Private Finance: A Microhistory, 1680–1705," The Journal of Economic History, Cambridge University Press, vol. 61(3), pages 593-615, September.
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    1. Anne Laurence, 2008. "The emergence of a private clientele for banks in the early eighteenth century: Hoare's Bank and some women customers1," Economic History Review, Economic History Society, vol. 61(3), pages 565-586, August.
    2. Efraim Benmelech & Tobias J. Moskowitz, 2010. "The Political Economy of Financial Regulation: Evidence from U.S. State Usury Laws in the 19th Century," Journal of Finance, American Finance Association, vol. 65(3), pages 1029-1073, June.
    3. Moshe Justman & Karine Beek, 2015. "Market forces shaping human capital in eighteenth-century London," Economic History Review, Economic History Society, vol. 68(4), pages 1177-1202, November.
    4. Richard S. Grossman, 2011. "The Economic History of Banking," Wesleyan Economics Working Papers 2011-004, Wesleyan University, Department of Economics.
    5. Damian Clarke & Manuel Llorca Jaña & Daniel Pailañir, 2023. "The use of quantile methods in economic history," Historical Methods: A Journal of Quantitative and Interdisciplinary History, Taylor & Francis Journals, vol. 56(2), pages 115-132, April.
    6. Nuala Zahedieh, 2010. "Regulation, rent‐seeking, and the Glorious Revolution in the English Atlantic economy," Economic History Review, Economic History Society, vol. 63(4), pages 865-890, November.
    7. Ann M. Carlos & Erin Fletcher & Larry Neal, 2015. "Share portfolios in the early years of financial capitalism: London, 1690–1730," Economic History Review, Economic History Society, vol. 68(2), pages 574-599, May.
    8. Zegarra, Luis Felipe, 2017. "Usury laws and private credit in Lima, Peru. Evidence from notarized records," Explorations in Economic History, Elsevier, vol. 65(C), pages 68-93.
    9. Kelly, Paul V., 2024. "Eighteenth-century Irish interest rates – market failure in a booming economy," Economic History Working Papers 127155, London School of Economics and Political Science, Department of Economic History.

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